February 1, 2023



Rugby Australia develops a messiah complex as rescue mission begins | Bret Harris | Sport

4 min read

It was only a month and a half ago that the private equity specialist Peter Wiggs was hailed as the saviour of Australian rugby, whose financial fragility had been exposed by the coronavirus pandemic. The chairman of Supercars was seen as the ideal candidate to repair relations with the broadcaster Fox Sports and organise a resumption of play.

But Wiggs only lasted 37 days as a Rugby Australia (RA) director. The day he was to be appointed as chairman, 6 May, he resigned after the board rebuffed his choice of a new chief executive, the Australian Olympic Committee CEO Matt Carroll.

Wiggs’s departure would have been more damaging if not for the fact RA had another possible saviour ready to fill his shoes – the former Network Ten chief executive and News Corp executive Hamish McLennan, who was appointed to the board as chairman on Friday, just nine days after Wiggs left.

Rumours had circulated for months McLennan would join RA’s board. Ironically, Wiggs and McLennan were meant to join together as part of the first wave of RA’s process of renewal, but for whatever reason that did not happen. Having that pair together would have given the board extra energy and expertise, but at least McLennan will finally get there when his appointment officially starts on 15 June.

On the same day RA announced McLennan’s appointment it confirmed it received $14.2m in “funding” from World Rugby as part of the global governing body’s coronavirus relief strategy. In truth it is a low-interest loan and will need to be repaid. RA’s interim chief-executive, Rob Clarke, said the sum would see the game through the next 12 months, but what about after that? That is where McLennan comes in.

We know he can count to a billion. A quick glance at McLennan’s impressive résumé indicates he possesses the financial expertise to help steer Australian rugby through troubled waters. He is the chairman of several ASX-listed companies, including REA Group, and deputy chair of Magellan Financial Group, a global equity fund. It is all multi-billion dollar stuff.

Running Australian rugby should be a walk in the park by comparison, but it is not. It is a difficult, complicated, frustrating exercise, which has seen numerous saviours come and go. As McLennan himself says: “Fortune favours the brave.” He will need to be brave to take on this Herculean task.

McLennan has stated he wants to “rebuild trust” across the rugby community. We have heard that before, too many times. If there is one thing that there is just too little of in Australian rugby it is trust, particularly between RA, the state unions and the premier clubs.

Eight years after implementing a so-called independent governance structure, RA is seeking to transform its governance model once again “to ensure all parts of the rugby community can thrive”. Creating the right governance model that is mutually beneficial for all of Australian rugby’s stakeholders is the key. It is a bit like a coronavirus vaccine. It is elusive, but once found a lot of problems will disappear.

In the meantime, the best way for McLennan to rebuild trust with the stakeholders will be to help RA re-negotiate its broadcast deal to put the game back on a secure financial footing, giving it some degree of certainty in uncertain times.

Fox Sports is playing hard ball after a falling-out with RA’s previous leadership, but it is unlikely someone with McLennan’s broadcast experience would have accepted the chairmanship if he did not think a deal could be done with Fox or someone else.

There have been reports Fox Sports is now only willing to pay $10m-15m a year for the broadcast rights, way down on its current $57m-a-year deal, while other reports say the pay-TV network has walked away from rugby. This is where McLennan’s experience in negotiating the Big Bash League TV rights will come in handy, but it is his time as a Mahogany Row insider at News Corp that will be potentially invaluable to Australian rugby.

Fox Sports survives on subscriptions. McLennan will have a fair idea of rugby’s intrinsic value to it as a driver of subscriptions. What is the magic number? Is it closer to what Fox is paying now or only $10m-15m, or even lower?

Without a lucrative broadcast deal Australian rugby cannot continue in its current form, and it needs some kind of TV agreement to exist at all as a professional sport. RA and McLennan will get a chance to test the waters when they re-negotiate with Fox Sports – or another mystery bidder – about a resumption of play this year.

There are various plans for a domestic Super Rugby competition with Australia’s four franchises plus the Western Force and the Japanese Sunwolves, with a starting date of early July, but this remains problematic while state borders are closed.

If RA can get some kind of competition up and running with support from a broadcaster it will keep Australian rugby going, but it is the next broadcast deal that will determine the future shape of the game in this country. McLennan will have to succeed in this field, or RA will be left again waiting for its next messiah.

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